KPI — March 2023: The Brief
Consumer confidence and sentiment remain mixed among consumers, as sticky inflation, ongoing supply chain challenges and persistent labor shortages continue to impact consumers and business owners alike.
The Conference Board Consumer Confidence Index® decreased in February for the second consecutive month. The Index now stands at 102.9 (1985=100), down from 106.0 in January (a downward revision). The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – increased to 152.8 (1985=100) from 151.1 last month. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – fell to 69.7 (1985=100) from a downwardly revised 76.0 in January. Most notably, recent data shows the Expectations Index is well below 80 over the past year – a level which traditionally signals a recession on the horizon.
Conversely, the University of Michigan Survey of Consumers – a survey consisting of approximately 50 core questions covering consumers’ assessments of their personal financial situation, buying attitudes and overall economic conditions – registered 67.0 in February, up 2.1 (3.2%) from the January final.
The consumer sentiment index measuring current economic conditions increased to its highest level since December 2021. However, incessant economic uncertainty continues to fuel consumer concerns. For example, the index of consumer expectations, which measures sentiment about the state of the economy in one to five-years’ time, dipped to 62.3 from 62.7, according to CNN reports.
According to the current NFIB Small Business Optimism Index, 28% of owners rate inflation as their top problem in business operations – up two percentage points from a month prior. In addition, 60% of owners reported hiring or trying to hire in February. Of those hiring or trying to hire, 90% indicated few or no qualified applicants for their open positions.
“Small business owners remain doubtful that business conditions will get better in the coming months,” says Bill Dunkelberg, NFIB chief economist. “They continue to struggle with historic inflation and labor shortages that are holding back growth. Despite their economic challenges, owners are working hard to create new jobs to strengthen the economy and their firms.”
Professionals in the automotive, RV and powersports industries remain steadfast in their efforts to evolve their business models and grow their brands in the face of adversity. As such, the monthly Key Performance Indicator Report serves as an objective wellness check on the overall health of our nation, from the state of manufacturing and vehicle sales to current economic conditions and consumer trends. Below are a few key data points explained in further detail throughout the report:
This Month’s Top Takeaways:
- Economic activity in the manufacturing sector contracted in February for the fourth consecutive month following a 28-month period of growth, according to the nation’s supply executives in the most recent Manufacturing ISM® Report On Business®. The Manufacturing PMI® registered 47.7%, 0.3 percentage point higher than the 47.4% recorded in January.
- The Consumer Price Index for All Urban Consumers (CPI-U) rose another 0.4% in February on a seasonally adjusted basis, after increasing 0.5% in January, says the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 6% before seasonal adjustment.
- The NFIB Small Business Optimism Index increased 0.6 points in February. At 90.9, the index remains well below the 49-year average of 98.
- Total new vehicle sales, including retail and non-retail transactions, are projected to reach 1,117,100 units in February 2023 – a 7.2% year-over-year increase, according to a joint forecast from J.D. Power and LMC Automotive.
- Powersports Business says dealers across the country reported an overall revenue increase of 2.9% in December 2022, according to composite data from more than 1,700 dealerships in the U.S. that utilize CDK Lightspeed DMS. On average, dealerships were down 2.9% in parts revenue, but up 22% in service revenue.
